Direct Carbon Offset Development: Creating economic opportunities and addressing climate change through carbon-offset projects

Direct Carbon Offset Development: Creating economic opportunities and addressing climate change through carbon-offset projects

Ecuador
Budget: 
$250,000 - $500,000
Website:
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

DCOD provides an innovative platform for the direct trade of voluntary carbon offsets that offers transparency and equity for both the purchaser and provider of these offsets. We help businesses mitigate their contribution to climate change by facilitating their direct investment in reforestation projects that produce carbon offsets. We leverage these investments to create economic opportunities for disadvantaged populations by supporting the cultivation of high-value renewable forest products. DCOD does more than simply broker the trade of carbon offsets: we fund, train and offer capacity support for individual landowners and farmers to ensure their projects have a measurable environmental impact and offer sustainable economic development and job creation.

About Project

Problem: What problem is this project trying to address?

DCOD has already engaged in extensive communication with a landowning family in the Telimela parish of Ecuador and plan to visit their land in August 2011 to learn more about the region and to begin establishing local partnerships. The focus area of our project is in Telimbela Parish of Chimbo Canton in the Bolivar Province of Ecuador. It is situated on the western slopes of the Andes at 1200m and has a subtropical climate. 1. Demographics: 98.64% White-Mestizo with the remaining 1.46% Indigenous. 2. Economics: (84%) agrarian focusing on the production of oranges, bananas and sugar cane as well as subsistence farming and cattle ranching. In the parish of Telimbela 99.74% of the total pop are economically active, however, only 6.73% of the pop work as salaried employees with a mere 9.5% of the pop owning land. Male migration has increased in recent years, especially after the economic crisis of 1999. Most men either migrate abroad or to the coastal economies where more economic opportunities exist. 3. Literacy: 8.93% for men and 13.03% for women. 4. Environmental issues: Deforestation and water management are the greatest environmental issues affecting the region. Today this area is nearly 90% deforested due largely to slash and burn agricultural practices, cattle grazing and subsistence farming. The widespread deforestation has led to severe desertification as lack of vegetation keeps the seasonal rains from replenishing the aquifers. Cattle farming and monoculture agriculture has destroyed much of the land and the steeper slopes are in urgent need of rehabilitation through stabilizing crops such as bamboo, amazon grape and pigue tree.

Solution: What is the proposed solution? Please be specific!

Direct carbon offsets is an innovative mechanism that creates a direct link between the buyer of carbon offsets (businesses) and the owners of the carbon offset project (landowners and farmers). DCOD designs customized carbon offset solutions for businesses seeking to adopt a green profile. These carbon offsets result in green investments in reforestation projects in Ecuador that will create economic opportunities for disadvantaged populations. By establishing a direct relationship between the buyers and sellers of carbon offsets, we will reduce transaction costs and introduce a more equitable and sustainable solution for small to medium carbon offset projects that are not feasible under the Clean Development Mechanism. Incentive based reforestation is an innovative approach for creating economic opportunities for disadvantaged landowners and farmers through the cultivation of high-value forest products that depend on proper forest management for their success. By cultivating forest products that have economic value and are effective at capturing and sequestering carbon, our approach links economic development and reforestation to create a sustainable solution. Our green marketing services are innovative in their approach to leveraging investments in carbon offset projects to enable businesses to target a growing market for sustainable products and services. Our project will show companies that investing in carbon offsets to adopt a greener profile is not simply the right thing to do, but can be profitable as well.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

1. Providing Carbon Offset Solutions: Our project provides solutions for businesses to offset their carbon footprint through a direct sponsorship of reforestation projects in Latin America. These carbon offset projects are implemented within the voluntary carbon market. 2. Facilitating Entry into New Markets: DCOD helps our clients to leverage these carbon offset investments as a tool for penetrating the growing market for green products and services. Through marketing, branding, and a firm web presence, we will connect cutting edge organizations that lead the way in sustainable business and environmental practices. This green network will enable our business clients to target a growing costumer base that demands greater social and environmental consideration from the businesses they support. 3. Creating Economic Opportunities through Reforestation: We utilize these carbon offset investments to fund reforestation projects that create economic opportunities for disadvantaged landowners and farmers through the sale of high quality sustainable forest products. 4. Building Local Capacity: DCOD facilitates the provision of trainings and tools for landowners and farmers to ensure the sustainable management of reforested lands and the continued capture and sequestration of carbon. 5. Marketing High-value Forest Products: We work closely with our partner landowners and farmers to assist in marketing their forest products to ensure that economic opportunities are realized and that the carbon offset projects are sustainable. 6. Verifying Carbon Offset Projects: DCOD also monitors the green investment projects to ensure that reforested lands are being properly managed and that carbon offset credits are verified and certified.
About You
Organization:
Direct Carbon Offset Development (DCOD)
About You
First Name

Mikael

Last Name

Clason Hook

Twitter

TBD

About Your Organization
Organization Name

Direct Carbon Offset Development (DCOD)

Organization Country

, NY

Country where this project is creating social impact

, B

How long has your organization been operating?

Less than a year

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Innovation
What stage is your project in?

Operating for less than a year

Share the story of the founder and what inspired the founder to start this project

DCOD is the brainchild of three friends who seek to combine their interest in the environment, agriculture, and economic development to address the pressing issues of climate change and poverty. Originally from Sweden, brothers Daniel and Mikael spent much of their early lives in developing countries where their parents worked as development professionals. Mikael pursued a career in international development and spent the past 10 years working on agriculture and rural development projects in Afghanistan, Colombia, the Philippines, and Thailand. He recently finished his MPA in International Development (MPA/ID) at Harvard. Daniel began his career as a carpenter and has worked in construction, design and project management in New York, Afghanistan, India and Spain. He earned his MA in International Affairs from the New School University and has since focused on enterprise development as a means for sustainable social and environmental advancement. James was born into a well-established agriculture family who helped introduce Community Supported Agriculture to the US in the 1980s. James has worked in the food and entertainment industry for 10 years in New York and is passionate about sustainable business practices and innovation in the field. He helped build and create Brooklyn Bowl, the world's first LEED certified Bowling Alley, which he currently manages. The three founders are looking to pursue their common interests and 30 years of experience to develop an innovative business model that will address climate change and poverty in a sustainable way.

Social Impact
Please describe how your project has been successful and how that success is measured

DCOD is a business and a key measure of success is our ability to develop a profitable business model that continues to grow and expand both in terms of our client base and our regional reach. Profitability will ensure the sustainability of our business approach to address climate change and poverty. That being said, we are a social enterprise and track a number of other metrics that measure our success in creating economic opportunities for disadvantaged landowners and farmers as well as our impact on the environment. The following metrics will be used to measure the success of our project:

-Annual profitability
-Number of firms investing in carbon offset projects
-Number of carbon offset credits sold
-Number of dollars invested in reforestation projects
-Number of hectares of land reforested
-Number of landowner and farmer beneficiaries
-Number of new jobs created,
-New income generated from forest products
-Regional and global reach of project.

Because DCOD has strong ties to entertainment and hospitality businesses in New York City we will initially approach these firms as possible clients. The Brooklyn Bowl has already expressed interest in DCODl and we plan to tap into the growing social network that drives these industries to successfully promote our model. Once we gain traction in the entertainment industry we will expand to other markets.

How many people have been impacted by your project?

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

DCOD will evolve by targeting a growing customer base of businesses that seek to adopt a green profile by reducing their carbon footprints. DCOD will cultivate this customer base by helping businesses realize the gains of “greening” their operations by tapping into the market for sustainable products and services. We will develop this market by creating a active online presence for green firms to connect and market their products and services to an expanding audience of conscious consumers. As DCOD builds its profile in Ecuador we will be able to grow our reach there as well. By focusing our initial approach we create a solid platform from which to build.
DCOD will initially operate in New York City and Ecuador, but will expand operations to other regions in the US and Latin America.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Limited market for carbon offset investments. Lack of interest among firms to adopt a green profile by investing in the voluntary carbon offset market is a potential barrier. We plan to overcome this barrier by initially targeting a few high profile firms that have expressed interest in this project. We will aggressively promote the economic benefits of greening business operations by highlighting the growing market for sustainable products and services. We will scale our business model by targeting a network of green businesses that are connected to these high profile clients. DCOD will continue to grow its client base by marketing its services through a web-based platform that will connect a broad network of environmentally conscious businesses.

Opposition to reforestation. Landowner and farmer opposition to reforesting lands is a potential barrier. We plan to overcome this barrier by identifying high value timber and non-timber forest products that are native to the region, have short growth life cycles, and can increase revenue streams for landowners and farmers in the near term. DCOD will promote the economic benefits of reforestation to landowners and farmers, facilitate the provision of trainings and tools, and provide assistance in marketing and sales of these forest products.

Insufficient revenue streams. Lack of sufficient revenue streams to maintain a profitable business model is a potential barrier. We plan to overcome this barrier by generating a range of revenue streams. These include:
1. Transaction fees on carbon offset purchases and carbon offset management.
2. The sale of carbon-offset futures to kick start local projects.
3. Advertising fees on our web-based green business network platform.
4. Public funds and grants from donor agencies, NGOs and foundations to support training programs for landowners and farmers in host country.
5. Private investment.

Tell us about your partnerships

Host country partnerships:

Government: DCOD is partnering with Ecuador’s Ministry of Agriculture to help identify possible participants for the project. The Ministry will offer invaluable technical, administrative and community support throughout the project. We have already consulted Eng. Jaime Rojas P.MSc. a former congressman and agricultural engineer with close ties to a number of university deans and government offices.

Academic Institutions: Local universities will offer technical and research support as well as supply us with experts for training and capacity building. Ecuador’s universities have strong agriculture departments and we will rely on this local support. Mr Rojas has already connected DCOD with several universities and we plan to meet their respective deans during a planed August 2011 trip to Ecuador.

Farmer Associations: DCOD will partner with farmer associations to identify project participants and map out appropriate areas for reforestation activities. Partnerships with these institutions will determine our success on a local level.

International Partners:

NGO’s/International Organizations: We will partner with the World Wildlife Foundation (WWF), UN REDD and the International Network for Bamboo and Rotan (INBAR), all of which have a presence in Ecuador and are committed to the development of bamboo as an alternative to sustainable economic development in the region.

Industry: DCOD has reached out to established manufacturers of sustainable timber products to initiate an increase in manufacturing presence in the region and to serve as potential buyers of forest products cultivated through the DCOD initiative.

Green Businesses: DCOD will consider all green businesses as potential clients and will focus on establishing strong working relationships with a wide community of environmentally conscious businesses. Our growth as a business will depend on the success of the green industry in general and the success of DCOD relies on building a strong community of businesses who are committed to taking significant steps towards climate change mitigation and environmental stewardship.

Explain your selections

Friends and Family: We will seek support from friends and family to generate start capital for our project. These investments will result in part ownership of the project and will allow us to develop the basic infrastructure of the DCOD project.

NGOs/Foundations: We intend to apply for NGO and foundation grants as well as social enterprise competitions for start-up capital to cover travel costs, web-site development, office space and initial project activities.

Individuals/Venture Capital: We will seek financial support from venture capitalists once the basic structure of DCOD has been set up. We will leverage the future earning potentials as a means to court sizeable investments to help pay for the scale-up of the DCOD project.

Businesses: We will begin to generate income from add placement and other marketing services directed towards green businesses and consumers through our web site. As our business grows and web traffic increases, so will the value of advertising and marketing potential.

US Government: We will seek foreign investment grants from the US government to help us develop export opportunities for sustainable forest products with the intention of expanding existing export/import relationships between Ecuador and the US.

Customers: Transaction fees from the sale of carbon-offset to client businesses will contribute to the majority of our working capital and will cover DCOD’s full operating expenses by year three.

How do you plan to strengthen your project in the next three years?

With the initial investment from friends, family, business competitions and grants, we will develop the necessary infrastructure for DCOD to begin operations. These activities include developing an online presence (website, Facebook, Twitter), rental of office space, subcontracting finance and legal support, as well as administrative and travel expenses. Once operational, revenues generated from transaction fees associated with the sale of carbon offset packages to businesses will take over as the primary source of the operating budget. At this stage we will look to augment our revenue with capital raised from individual investors and private equity funds to continue growing our business. As our client base grows our website will begin to serve as a major networking site for green businesses and consumers. Heavy site traffic will lead to an increased opportunity to sell directed advertising space and generate a steady stream of revenue for DCOD. We will continue to secure private investment throughout the life of the project as we work to expand DCOD’s reach to new markets in the US and Latin America. By year three we will look to introduce new services that have the potential to generate additional revenue for DCOD. For example, DCOD is already exploring the development of consulting services to advise client firms on how they can reduce their carbon footprints and lower operating costs.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Lack of visibility and investment

SECONDARY

Restricted access to new markets

TERTIARY

Lack of skills/training

Please describe how your innovation specifically tackles the barriers listed above.

Lack of visibility and investment: Our project secures green investment funds from firms seeking to offset their carbon footprint to fund reforestation projects that will create new economic opportunities and jobs for disadvantaged landowners and farmers.

Restricted access to new markets: Our project leverage its network of green businesses and manufacturing firms to create new market opportunities for high value forest products. Opening up these markets will create new jobs as well as long term investment opportunities for the region.

Lack of skills/training: Our project will train landowners and farmers to better manage reforested lands, effectively market and sell their products, maximize profits, maintain carbon sequestration levels, and improve the local ecology.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

Grown geographic reach: Multi-country

SECONDARY

Leveraged technology

TERTIARY

Enhanced existing impact through addition of complementary services

Please describe which of your growth activities are current or planned for the immediate future.

Grow geographic reach: We plan to expand our provision of carbon offset solutions to other cities in the US and to implement reforestation projects in other regions of Latin America as part of our growth strategy.

Leverage technology: We will create a user-friendly web-based platform to expand our client base and increase interest in green investment opportunities. We will also leverage technology to encourage the development of innovative materials using forest products supported by our project to increase revenue streams for beneficiaries.

Complementary services: We plan to introduce new complementary services such as consulting services to advise client firms on how they can reduce their carbon and water footprints to lower operating costs as part of our growth strategy.

Do you collaborate with any of the following: (Check all that apply)

Government, Technology providers, NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

Government: We will collaborate with governments and donor agencies to secure funding support for demonstration farms and training programs.

Technology Providers: We will work with technology providers to develop a web-based platform for connecting and growing our network of green businesses.

NGOs/Nonprofits: We will draw upon the resources of NGOs and non-profits in the region to identify partner landowners and to increase the reach of our project.

For Profit Companies: We will collaborative with for profit companies to develop marketing channels for forest products and to develop new innovative materials using these forest products.

Academia/Universities: We will draw on academic research and universities to inform and enhance the activities of our project.